UTILITY TAX BACKING HAS 1 CONDITION

DEERFIELD BEACH -- A move to let voters decide whether they want to reimpose a utility tax has earned a favorable preliminary reaction from city groups and associations.

Final approval from their members, group spokesmen said, probably would hinge on one condition -- that the money raised from the utility tax be used to reduce the city's property tax rate, the highest in Broward County.

Frank Cuomo, a member of the Single Family Homeowners Association, which represents about 1,800 families, said, "We've got to have guarantees that the taxes, when collected, will go straight to reduce the ad valorem taxes."

At their first discussion on the matter, the majority of city commissioners in favor of putting the question before voters -- Commissioner Ernest Visco, who first suggested the referendum, Mayor Jean Robb and Vice Mayor Ben Budd -- all said they wanted a similar guarantee.

While not endorsing it, those commissioners said they at least would support letting voters decide whether to re-establish the utility tax, which residents overwhelmingly voted to repeal in a 1979 referendum.

A first reading of an ordinance giving the city the authority to collect a 5 percent utility tax on electric and local phone bills is to take place at the commission's meeting Tuesday.

Finance Director David Bok said a 5 percent utility tax would raise about $1.25 million a year.

Cuomo said association members would not discuss the referendum plan until their first meeting after a summer break, on Sept. 16. Nonetheless, he said, informal discussion so far has favored the utility tax.

Having a second source of income for the city would spread the tax burden to businesses and condominium owners and perhaps remove some of the pressure on single-family homeowners, Cuomo said.

Joseph Koppel, president of the Condominium Owners Organization of Century Village East, said early reaction to the proposal has been favorable there.

Establishing the utility tax might mean some residents, who do not pay property taxes becaues their units are assessed below the $25,000 homestead exemption, would have to pay more taxes, Koppel said, but more probably would see their property taxes decrease as a result.

"The few people that I talked to seemed to favor it for a very common sense reason," Koppel said. "First, because it could reduce the ad valorem taxes and, second, it would give us a very broad tax base."

His organization has taken no stand on the proposal yet, Koppel said, in part because the commission has not taken formal action. But Koopel predicted that an endorsement would carry some influence among village residents.

Although a Chamber of Commerce spokesman said the chamber has yet to address the question formally, initial approval also has been expressed among some members.

Philip Gonot, chairman of the local government subcommittee of the chamber's governmental affairs committee, said members' primary concern would be that a utility tax would make Deerfield Beach too expensive for new, large industrial developments.

The thought of a new tax, however, may not be popular among some residents who are used to paying only the traditional property tax.

Dottie Smith, a member of the Deer Run Homeowners Improvement Association, said residents she had talked to would prefer to keep the present tax program.

"If the city really needs the tax, we would prefer to have it in a lump sum," Smith said. "If they've got to take it, we're used to (property taxes). It hurts, but we're used to it."